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Home / Opinion / Two years of Modi: The forgotten promise of minimum government

Narendra Modi won a spectacular election victory two years ago on the attractive promise of combining minimum government with maximum governance. It is time he focused on the first part of the pledge.

Parliament last week struck down 1,053 outdated laws. Among them are a law on shooting an elephant, confinement of lepers, offering water to strangers and one that rather improbably makes it a crime for adult male Punjabis to refuse to act against a swarm of locusts. The very fact that such laws existed in contemporary India is enough to generate derisive laughter. But there is a deeper lesson here as well: The institutional structure of the Indian government is unsuited to the needs of a modern nation state.

Now, take a look at the size of the Modi cabinet. The first cabinet headed by Jawaharlal Nehru after independence had 17 members. It made up in stature what it lacked in numbers. The Modi government has 28 cabinet ministers plus 38 ministers of state. This is thankfully slimmer than the jumbo cabinets of the United Progressive Alliance era—but far from the promised goal of minimum government.

Does India seriously need a ministry of culture or minority affairs or youth affairs? Modi has done well to put two related ministries—roads and shipping—under one very effective man. But why separate ministries for heavy industry, chemicals and fertilizers, food processing, textiles, mines, medium enterprises and steel?

There are a few common reasons for the surfeit of laws and the surfeit of ministries in India. First, the replacement of the exploitative colonial state by a development state saw a massive expansion of government activity, which now needs to be rolled back as India has moved ahead. Second, New Delhi had invaded the constitutional territory of the states in a manner which does not fit well into the new narrative of cooperative federalism. Third, shifting political coalitions encouraged the growth of ministries as a way of dispensing patronage. Fourth, there is the deep belief across the political spectrum that every problem that grabs the headlines needs a new law.

The net result? A lawless society with a surfeit of laws and ineffective governments with a surfeit of ministers.

The task before the prime minister is not restricted to shedding outdated laws or ministries. The parallel challenge is to begin building a new institutional structure that is suitable for a modern market economy, a potential global power and an aspirational middle-income country.

Some elements of this can be gleaned from the first two years of the Modi government. Here are a few random examples. The attempt to make rules more important in economic policy with a formal monetary policy agreement with the Reserve Bank of India or the recent commitment to a new fiscal responsibility law. The decision to let states such as Rajasthan take the lead in reforms of items in the concurrent list of the Constitution. The initial discussions about how to set up a new welfare system based on the principle of insurance.

These institutional changes will in the long run prove to be more important than the individual reforms that business lobbies or the financial markets obsess about. But old habits die hard. We have also seen a lot of unnecessary meddling over the past few months by the education ministry in university administration or attempts to fix prices in the belief that consumer interest is being protected from marauding firms.

Modi missed his Thatcher moment in his first few months in office, as was evident from the first budget presented in July 2014. His political capital was then at its peak. The opposition, both parliamentary as well as within his own party, has had a chance to regroup since then. Few can fault the prime minister for his administrative acumen—but his reformist credentials are now being questioned.

Modi should go back to his old promise of maximum governance combined with minimum government. The repeal of outdated laws is a good start. There is also a lot of other outdated stuff that needs to be replaced with the fresh rules suitable to a new India.

Has the Narendra Modi government made good progress on the campaign promise of minimum government and maximum governance? Tell us at views@livemint.com

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